AMSTERDAM, March 30 The European Central Bank
could start winding down its massive asset buying scheme earlier
than planned but only if the economy continues to outperform
expectations, Dutch central bank chief Klaas Knot said on
The euro zone economy, on its best run in a decade, has
already performed better than projected for the most part since
September and the strong run could still continue, Knot, a
policy conservative who has opposed many of the ECB's past
easing measures, told a news conference.
"Only if the economy does even better than we now expect in
our estimates could we consider bringing the tapering forward,”
Knot said, referring to the ECB's plans to buy 60 billion euros
worth of bonds each month until the end of the year.
"But since September last year, the economic surprise
indexes have turned round and are on quite a high level," Knot
said. "They are better than our expectations. And why shouldn't
that continue in the rest of the year?"
The ECB plans to buy at least 2.3 trillion euros worth of
bonds, all in the hope of cutting borrowing costs to revive
growth and ultimately generate inflation.
Knot added that even if the asset buys continue until the
end of the year, as now planned, they should then be wound down
as soon as possible in 2018.
But he dismissed calls by some policymakers to review the
bank's guidance for keeping rates at their present or lower
levels until well after the asset buys end.
"I think this sequence makes sense, the forward guidance
makes sense and I don't see a need to revisit that now,” Knot
"It's a (sequencing) that has also been applied in the U.S.
and the UK when exiting, and the logic is one of a consistent
communication message which is neutral along the yield curve and
which prevents giving conflicting views as to the front end and
the long end of the yield curve."
(Reporting by Thomas Escritt; Writing by Balazs Koranyi;
Editing by Alison Williams)